Google's Schmidt Erred in Online Identity vs. Facebook

Google Executive Chairman Eric Schmidt admitted that he failed to move quickly enough to address the growing threat of social-network power Facebook.

Google
(NASDAQ:GOOG) Executive Chairman Eric Schmidt acknowledged that he failed to
move quickly enough to address the market for online identity, enabling
Facebook to build the world's largest social network.
Schmidt, who
passed his CEO baton to Google co-founder Larry Page in April said May 31 at
the D9 conference in Rancho Palos Verdes, Calif., that he knew he needed to
move more aggressively in the social-network arena but failed to do it.

"A CEO
should take responsibility. I screwed up," Schmidt said in his often candid way, noting that he and
fellow executives discussed the growing Facebook threat in internal memos four
years ago but did not act on the trend quickly enough. AllThingsD has this clip of Schmidt speaking yesterday,

Founded by
young CEO Mark Zuckerberg, Facebook comprises a social network of over 600
million users. Facebook also represents Google's biggest threat on the Web
today. Google has the lion's share of Web search, with more than 1 billion
searchers, and offers Gmail and other popular Web services.
However,
Facebook is currently notching serious user engagement, the core stickiness
metric that gauges not only how often people frequent a Website, but how much
time they spend there.
Facebook users
are spending a half or more of their time on the social-networking site a day, messaging and
chatting with friends, planning events, and sharing photos and videos. Facebook
has even extended its reach outside its walled garden with its "Like"
button, allowing users to share information about their tastes and preferences
about Websites and brands with their friends on Facebook.

Schmidt said
Google would love to access this wealth of data. Facebook renders its data
untouchable by Google's search crawlers, opting to cede this information to
Microsoft's Bing search engine.
The social-network
stickiness and Google's inability to index Facebook data are disturbing enough
to Google. Facebook also poached top Google ad executive Sheryl Sandberg, who
as COO for the last two-plus years has aggressively ramped the company's social
ad services.
ComScore said
Facebook now commands 31 percent of display ad share, which
reduces the online ad pie for companies such as Google and Yahoo.
At D9, Schmidt
also indicated that while he admires a lot of what Facebook has done for online
identity, he believes such a fundamental service shouldn't be owned by a single
company.
"I think
the industry would benefit from an alternative to that...Identity is incredibly
useful because in the online world you need to know who you are dealing with,"
he said. This would help Google build better profiles of its users.
Google hopes
to cultivate some of the social engagement and ad success Facebook is enjoying
with its +1 button, which is launching today to Websites
everywhere.
Users will be
able to click the +1 button next to every search result and search ad to signal
their preferences and tastes to friends they are connecting to through Google
Profiles. Ideally, +1 will provide another target for Google's massive
advertising base.